What To Know In Charter's $55 Billion Bid For Time Warner

Charter Communications, Inc. (NASDAQ: CHTR) has agreed to pay roughly $55 billion in cash and assume Time Warner Cable Inc's (NYSE: TWC) debt, a deal that values Time Warner Cable at $78.7 billion.

Per share, Charter will pay $195.71 - a 22 percent premium to Friday's closing price. For Time Warner Cable, the deal represents a 30 percent premium over Charter's failed 2014 bid of $61 billion.

Charter Communications will continue its acquisition of Bright House Networks, a $10.4 billion deal the company announced March. Since the Comcast Corporation (NASDAQ: CMCSA) bid for Time Warner fell through amidst regulatory scrutiny, Charter Communications had the ability to renegotiate its deal with Bright House Networks. Instead, the two companies decided to move forward.

Shares of both Time Warner and Charter Communications are higher in the premarket versus Friday's closing price. Time Warner last traded at $185.05, up 8 percent from a $171.18 close. Charter Communications added 5 percent to $184.25.

Specifically, Time Warner shareholders have the option to receive either $100 or $115 in cash alongside 0.5409 or 0.4562 in Charter stock, respectively. The two companies said they expect the deal to close in 2015.

This morning, Federal Communications Commission Chairman Tom Wheeler said that the deal will have to show not only that there is an "absence" of harm, but that the deal will benefit consumers. Prior media reports suggested that Wheeler had reached out to Time Warner and Charter independently to reassure them that the FCC was open to industry mergers.

This specific deal adds 12 million customers to Charter's rolls, with major hubs in New York City, Los Angeles and Dallas. The new Charter Communications will have 17 million residential television subscribers and 18.8 million broadband customers.